Gold Breaks $1,100 New High
Commodities / Gold & Silver 2009 Nov 06, 2009 - 11:02 AM GMTBy: GoldCore
In afternoon trading on Friday the gold price momentarily breached the $1,100 an ounce level for the first time. Although its time at this level was brief it concluded what has been a very bullish week for gold.
The bullish sentiment towards the yellow metal has been built on a very strong base. Central banks have underpinned the price with revelations during the week that the Reserve Bank of India has become a sizeable holder of gold, buying 200 tonnes.
The ECB have been sellers of gold over the past few years but comments from ECB’s Paul Mercier, at the annual London Bullion Market Association conference, suggests that this may not continue indefinitely. Mercier stated “we cannot be certain that gold holdings will continue to decline in the coming years”. He also suggested that increased future buying by the Chinese authorities cannot be ruled out.
From a macro-economic point of view three of the world’s major central banks left interest rates unchanged this week. The US Federal Reserve stated that they remain committed to keeping interest rates “extremely low for an extended period of time”.
Central bank sentiment coupled with a lack of improvement in the global macro-economic picture sustains a bullish outlook for gold.
By Stephen Flood
Director
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UK |
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